What is Contracting

A contractor is a self-employed professional who provides their skills and services to a client on a project or contract basis, usually for a set period of time. They work independently rather than as an employee, which means they have control over how, when, and where they work. Unlike employees who are paid through a PAYE system, contractors are responsible for managing their own tax, accounting, and payroll. They must register with Revenue, file an annual tax return, and pay any income tax, PRSI, and USC owed. Many new contractors choose to operate through a Limited Company or an Umbrella Company (PAYE or Director), depending on their preferences, earnings, and level of administrative involvement. These company structures act as a vehicle which allows them to invoice clients, claim business expenses, and work in a more tax-efficient way. The most efficient solution for you depends on your personal circumstances and your contract work. We’re here to help you set-up and ready to start your contract quickly. Book a call for fast, free set up or ring our team on (01) 611 0707.

A limited company, often referred to as a “Personal Limited Company,” or Private Limited Company is a business structure and separate legal entity that separates your personal finances from your business. This protects your personal assets. A Limited Company is fully owned and controlled by you, making it a popular choice for small businesses, sole traders, and contractors in Ireland. Setting up your own Personal Limited Company is ideal for those who want to buy assets (such as a company car), want to retain funds in the company, or employ a staff member or subcontractors. This business is highly beneficial allowing you to build your own brand, buy a company vehicle, control your finances or manage your personal wealth, however it does require financial and legal paperwork to set up. Due to this people often work with an accountant to set the limited company up. If you would like to set-up your own company book a free consultation with a member of our team.

To set up your own Limited Company in Ireland, you’ll need to find a business name and register your company with the Companies Registration Office (CRO). You will need to register a physical office address in Ireland. Appoint at least one director (who can also be a shareholder), and you will need a second person to act as Company Secretary. You then must write and file your Articles of Association (essential legal documents that outline your company’s purpose, structure, governance, and operations) with the CRO. Next register the beneficial owner with the Register of Beneficial Owners (RBO) and make sure to register for tax with the Revenue. You need to open a business bank account and file your first annual return. If this sounds complicated, our dedicated team of experts is here to simplify this process for you. We handle all the necessary paperwork and setup steps, leaving you with just one task – choosing your business name, book a free consultation or call (01) 611 0707.

No you don’t need an accountant for a limited company, if you like you can set up a limited company on your own. However, due to the complicated process and multiple financial and legal paperwork that is required, it is often preferred and highly recommended to work with an accountant. If an accountant sets up your limited company and files your annual corporation tax return for you, you are ensured compliance with Revenue and the Companies Registration Office requirements – giving you peace of mind, stability, and also the expertise that maximises your take home pay. Making sure you have claimed the business expenses you’re entitled to and are benefitting from all the rewards a limited company set up can give you.

A sole trader is a self-employed individual who owns and operates their business on their own. It’s the simplest way to set up in business in Ireland and is popular among freelancers, consultants, and small business owners who want to work independently without setting up a limited company. As a sole trader, you and your business are legally the same entity, meaning you keep all the profits after tax but are also personally responsible for any business debts or liabilities. You’ll register as self-employed with Revenue, file an annual tax return under the self-assessment system, and pay income tax, PRSI and USC on your profits. A lot of sole traders would trade under their own name, while others choose a business name registered with the Companies Registration Office (CRO). This setup is more straightforward and quicker to set up but it does come with limitations in terms of growth and less protection. On the other hand, a Limited Company is a separate legal entity from its owner, protecting you and your business. To set up a Limited Company contact us on (01) 611 0707.

Registering as a sole trader in Ireland is straightforward and often the first step for anyone starting out in self-employment. You’ll need to let Revenue know that you’re becoming self-employed by registering for income tax under the self-assessment system. This can be done online through the Revenue Online Service (ROS). Once that’s complete, Revenue will issue you a Tax Reference Number, which you’ll use when filing your annual return. If you plan to trade under a business name instead of your own, you’ll need to register that name with the Companies Registration Office (CRO). It’s also a good idea to set up a separate business bank account to help keep your income and expenses organised. Depending on your annual turnover, you may also need to register for VAT and file VAT returns.
After registering, you’ll be responsible for managing your own tax, bookkeeping and tax filing. Many sole traders choose to work with a specialist accountant like us at Contracting PLUS. Once you become a client of ours, all of that will be taken care of. You’ll also get a Dedicated Account Manager who will advise you on what business expenses you are eligible to claim to minimise your tax bill.

People use Umbrella Companies as they offer simplified administration, and many tax benefits. Contracting PLUS helps contractors and self-employed professionals with free setup of Umbrella Companies including insurances, accounting, tax, payroll, invoicing, and more. This lets you maximise your earnings and focus on what you do best without the administrative burden. Our experts can guide you through the pros and cons, helping you find the best solution for you. Book a free consultation with a member of our team.

An Umbrella Company is a company that is already setup. They have tax registrations in place, they are insured, VAT registered, named, and have a bank account in place. It acts as a vehicle that allows you to get paid in a compliant manner when operating as a professional contractor or when self-employed. You can use an umbrella company when you need it and then easily leave the company when you no longer have a use for it. Our quick and simple setup allows you to start your contracting career straight away. Umbrella companies are a good option for people who don’t want to setup their own Personal Limited Company. An Umbrella PAYE solution allows you to operate through an Umbrella Company as a PAYE member. However, an Umbrella director structure is where you are the director of the Umbrella company. This allows you to avail of claimable business expenses and tax benefits that are not available to PAYE workers, which means that you are maximising your income.

How much tax contractors pay depends on a few factors including how much you earn, your company structure, and the expenses and tax credits you can claim. If you’re a self-employed sole trader or independent contractor, you’ll pay income tax under the Revenue self-assessment system. The two main income tax rates in Ireland are 20% and 40%, depending on your income level. So, if your annual income stays within the standard rate band, you’ll pay 20% income tax on that portion and on anything above it, you pay 40%. But your tax bill can be reduced by claiming allowable business expenses where applicable such as professional fees, tech equipment, home office equipment, travel and even pension contributions. You’ll also need to pay PRSI and the Universal Social Charge (USC), which varies based on income bands. If you operate through a Limited Company, your tax responsibilities are different. Your company pays corporation tax on its profits, and you’ll pay personal tax on any salary or dividends you take from the company. This setup can often be more tax-efficient depending on your earnings and long-term plans. Every individual’s situation is unique, so it’s worth speaking to a team member of ours who can help you understand your options, reduce your tax liability, and make sure you’re always compliant with Revenue. For an estimation of your potential take home pay as a contractor use our tax calculators.

As an independent contractor in Ireland, you’re responsible for filing your own annual income tax return through the Revenue Online Service (ROS). This process is known as the self-assessment tax return, and it applies to anyone who earns income outside of PAYE employment. You’ll first need to register for self-assessment with Revenue which is where you’ll file and pay your taxes each year.
Your tax return must include all income earned during the tax year, including your payments and any other taxable earnings or side incomes. You can also claim allowable business expenses, pension contributions, and tax credits to reduce your overall tax bill. If you’re unsure how to calculate your tax or what expenses you can claim, working with a specialist accountant for contractors like Contracting PLUS can help you stay compliant and maximise your take-home pay. The deadline for filing and paying your tax is October 31st each year, However, that’s the latest day by which you need to file. If you’re serious about not paying too much tax and want time to consider any options or advice we might have about minimised your tax liability, then we really recommend you get in touch with us earlier.